Troubled ZTE denies it's going to cut jobs
The ongoing soap opera surrounding Chinese telecom giant ZTE (Shenzhen: 000063.SZ) continues. A Reuters report says that the company—looking at lower financial performance and a probe by the FBI and U.S. Commerce Dept.—will not be cutting jobs.
Some reports had estimated that 10,000 workers would be given the Chinese equivalent of a pink slip but, "ZTE is not planning any lay-offs this year and thousands of college graduates will join the company to work in R&D jobs. The company is also committed to building up local employment in overseas markets, and continues to hire experienced local staff," according to a statement.
That sort of hiring optimism seems somewhat out of line with the slew of bad news that's been surrounding the company. Financially, shares of ZTE stock have been "falling sharply for three consecutive (Hong Kong) trading sessions" and hit their weakest level since March 2009, the story said. Overall, share prices have been down about 60 percent this year and the company didn't help matters when it predicted its first half earnings would fall by 60-80 percent compared to a year earlier thanks to lower gross margins, foreign currency exchange losses and postponements by network operators such as China Mobile.
Other bad news for the company is an ongoing probe by the FBI and Commerce Department into allegations that the company and its subsidiary ZTE U.S.A. sold sensitive telecommunications equipment to Iran in violation of U.S. law. Some other reports said the company is also being looked at for how it's responded to that investigation.
For its part, ZTE, the Indian story said, said it has not been contacted by the FBI and was "cooperating with the U.S. commerce department, but declined to provide details."
Finally, there's not even safe haven in Europe where the European Union is looking at both ZTE and its fellow Chinese provider Huawei based on "possible illegal subsidies they received from the Chinese government."
- Reuters via the Times of India has this story